From Pikes Peak to metropolitan Denver, rugged Durango to the hot springs of Ouray, Colorado is an incredibly scenic state. The best way to explore the wild and hidden areas is on a Colorado road trip.
One vital component of a picturesque road trip through the Centennial State is, of course, a car. If you’ve financed a vehicle in Colorado, chances are good that a car is vital, not just for travel through this gorgeous state, but to get to and from work, or to see family as well. Falling behind on bills may put that car in jeopardy of being repossessed, which you can probably ill afford.
Car repossession is a serious problem for many financially-distressed people who depend on reliable transportation to get to work and to earn an income. In addition to possible job-related consequences, not having a car can make daily living in rural Colorado and the sprawling Denver metropolis much harder than it needs to be.
The bottom line for most people is simple: You need your car. Especially if you live in a smaller community where public transportation is lacking or non-existent.
If you are currently in the midst of fighting to get back your repossessed vehicle or you are considering filing for bankruptcy to keep your car, contact our experienced Colorado bankruptcy lawyers for assistance. Our team of qualified legal professionals handles both Chapter 7 and Chapter 13 bankruptcies from Grand Junction to Granada, Fort Collins to Durango, and all the surrounding communities throughout Colorado. We can discuss your case, review your situation, and provide you with the option we feel will lead to the best possible outcome.
If you take out a car loan (finance) or lease in Colorado, to complete the transaction you will have to sign a loan agreement (promissory note) to pay back the loan in installments. During this period, the lending company is the one who actually owns the title to the car, not you, the borrower. If at any time during the agreed payment period, you default on the loan or fall behind on payments, the lender has the right to take the car back. This is called vehicle repossession, and it is perfectly legal in Colorado.
Below are a few ways the automatic stay law can help you when filing for bankruptcy.
In most cases, you can miss one loan payment before being subject to vehicle repossession. Under Colorado law, you must be in default on your loan agreement for at least 10 days before your lender can send you a default notice. After your lender sends a notice of default, you have an additional 20 days to bring your loan current before your lender can repossess your car. What counts as a default depends on your contract terms.
The first formal step in the repossession process is the Notice of the Right to Cure. This Notice informs you that you are behind on payments and tells you the specific amount that you need to pay to get caught up, and the due date for that payment. You have 20 days to catch up on payments.
If you can’t come up with the amount of money needed to cure the default and the lender isn’t willing to work with you, bankruptcy may allow you to keep your car.
Our experienced Colorado bankruptcy attorneys handle cases for individuals filing for Chapter 7 or Chapter 13 bankruptcy in El Paso County and the surrounding areas.
Once you have filed for bankruptcy with the help of your CO bankruptcy attorney, something called an automatic stay is immediately put into effect. This is an operation of law that will prevent your lender from continuing with efforts to repossess your vehicle while the stay is in effect, which usually lasts the duration of your bankruptcy case.
When you file a Chapter 7 bankruptcy, your creditors must stop all collection actions against you, including repossession. This is only a short-term solution, though, because the protection of the automatic stay isn’t permanent. This delay may give you time to come up with the money to cure the default, or it may encourage the lender to renegotiate the contract in an agreement that is filed with the bankruptcy court.
When you file for chapter 7 bankruptcy in Colorado, all of your dischargeable debts will be wiped out. This includes not just credit card and medical bills, but also the debt you owe on your car. However, Chapter 7 bankruptcy does not cover all money owed on a vehicle, just past due payments you may have missed. Discharging a Chapter 7 bankruptcy will clear past missed payments, however, if you still owe money for future car payments you will be responsible for covering those if you wish to keep possession of your vehicle.
A Chapter 13 bankruptcy will also stop the repossession of your vehicle, and it offers other perks. Chapter 13 bankruptcy, also known as a wage-earners bankruptcy, allows the petitioner to consolidate all debt (including owed payments on a financed vehicle) and make payments on that debt over a fixed period of time. In other words, if you can make both your regular car loan payments and your repayment plan payments, you will be able to keep your vehicle or have it returned by the lender. If he or she refuses to cooperate, the bankruptcy judge will typically order the lender to return your vehicle.
You and your Colorado bankruptcy attorney will determine if you qualify for Chapter 13 bankruptcy, which may extend the length of time you have to pay off the vehicle, reduce your interest rate, and possibly reduce the amount you owe on the vehicle.
It’s important to note that the automatic stay is a temporary solution while the resolution is worked out. The skill of your Colorado bankruptcy attorney can make all the difference, as they act on your behalf to negotiate with the court and also the lenders holding your debts. There could be opportunities to allow your overdue payments to be forgiven or at least added to the end of the loan so that you can still keep your possessions.
Effective action must be taken fast to help you avoid further financial problems. There are options for you, and it is important that you find out what can be done before it is too late. Contact our Colorado bankruptcy lawyers today if you are facing repossession in Colorado Springs, Denver, Aurora, or the surrounding areas. Our team of legal professionals will review your situation and determine what can be done to get you on the road to a debt-free future.
